African Eagle Resources plc

FULL JOINT VENTURE SIGNED TO REPLACE HEADS OF AGREEMENT TO EVALUATE AND DEVELOP MKUSHI COPPER MINES IN ZAMBIA

News Report
29 May 2007

Full Joint Venture Agreement signed with development partner CGA Mining replacing earlier Heads of Agreement
Joint Venture Company Established
Pre-feasibility study expected Q3 2007
Production Decision by Q3 2008

AIM quoted African Eagle Resources plc ("African Eagle" or "the Company", ticker AIM: AFE) today announces that it has signed a full Joint Venture Agreement ("JV") with Australian listed CGA Mining Limited ("CGA") that replaces the Heads of Agreement (Heads) signed in July 2006, under which the parties have been working together for the development of the Mkushi Copper Mines in Zambia.

The signing of the JV and incorporation of the JV Company formalises the ongoing alliance between African Eagle (AFE) and CGA in line with African Eagle's strategy of bringing in partners with the expertise and funds to take its discoveries into production as swiftly and cost-effectively as possible.

CGA's work at Mkushi is progressing extremely well. A pre-feasibility study is expected to be completed during the third quarter of this year together with an updated resource estimate, further metallurgical test work and preliminary financial modelling. CGA has expended around US$1.7 million on exploration and development costs on the project to date including more than 5,500m of reverse circulation drilling and 6,000m of diamond drilling. About 2,200m of drilling remains to be completed in the current programme which will be followed by infill drilling to evaluate better the high grade ore shoots. Currently, three diamond drill rigs are operating on site to ensure the key milestones are achieved.

Pursuant to the JV agreement, AFE and CGA have set up a joint venture company, Mkushi Copper Joint Venture Ltd, holding 49% and 51% interests respectively. The JV formalises the Heads of Agreement, whereby CGA is conducting and solely financing a bankable feasibility study ("BFS") at Mkushi to be completed by Autumn 2008. At the same time African Eagle is conducting exploration over a wider area, funded jointly by the parties pro rata to their participating interests in the JV. CGA will arrange finance for the development of mining operations if the BFS is positive. The JV has recently been approved by the Zambian Minister of Mines and Mineral Development and the Prospecting Licences covering the mineral rights at Mkushi will be assigned to the JV Company.

Managing Director Mark Parker comments: "The signing of the full joint venture agreement sets in place the administrative framework which African Eagle and CGA will need in order to take the Mkushi project towards production. In the meantime, CGA has been making excellent progress on its feasibility work while African Eagle's exploration in the surrounding area has indicated many promising targets."

"We are delighted to have CGA, whose managers have a significant track record of developing mines in Africa quickly and cost-effectively, as our development partner at Mkushi."

John Park
Chairman
African Eagle Resources plc

Qualified Person

Information in this report relating to exploration results is based on data reviewed by Mr Christopher Davies BSc, MSc, DIC, FSEG, Operations Director for African Eagle, who is a Fellow of the Australasian Institute of Mining and Metallurgy, has more than 26 years relevant experience in mineral exploration and is a Qualified Person under AIM rules. Mr Davies consents to the inclusion of the information in the form and context in which it appears.